Lots being written about the Cloud, most of it quite dark and gloomy.  In fact I’m surprised, that Hoff hasn’t got a preso spooled up called “The Toxic Cloud” or something similarly ominous for his next speaking tour.
That said, the Economist does a great job distilling the issue into a simple statement -

Cloud computing is a trade-off between sovereignty and efficiency.

Let me ask you -  if you had to put your money on one of those horses, considering your average profit-preoccupied business, which would it be?  I’d put my bottom dollar on the thoroughbred named “Cost Center Reduction”, to place.

WHO ARE WE TO STAND IN THE WAY OF “PROGRESS”?

I’m always fond of Jack’s rule that the role of information risk management boils down to three deceptively simple premises:

• Reduce Risk.
• Reduce Loss.
• Create Operational Efficiencies.

So it would seem antithetical to the charter of the Chief Security Officer to stand in the way of progress as embodied by “cloud computing” (not to mention dangerous to long-term job security).  And I think that this presents opportunities to discuss strategies for managing risk, strategies that aren’t too theoretical and have practical application (though actual “cloud” use by enterprises may be rare at this point).

ON RISK REDUCTION IN THE CLOUD (or, How To Learn From the Shortcomings of PCI DSS)

The good news is, there’s already a well-established model for managing the risk around outsourcing the processing of “confidential” information.  The bad news is, that model kinda sucks it.

The Payment Card Industry, known as the “PCI” or “meal ticket” to many in the industry, faced a similar problem with the introduction of GLBA.  As I see it (and I’m not at all close to the PCI, at all, so this is all just abstract soliloquy) the PCI had one of two choices when faced with the prospect of other people managing their sensitive information:

1. Accept the *massive* amount of GLBA risk their business creates and spend a TON of money to build out the infrastructure (both process and IT) to manage the consumer data themselves (in conjunction with the banks, of course) and never have it grace the computing systems of the retailer.  Or,
2. Transfer the GLBA risk down to the retailer and have them bear the majority of the risk (and cost of reducing risk to a level that might be tolerable to the US Government).

(Martin, you may recall our Twittering about PCI a while back.  This is the crux of my view on the subj.)

Now fortunately, the CSO’s of the world are going to be a little more “invested” in protecting the information they are stewards over, and unlike the PCI, will remain primarily responsible for the C, I, & A of the data in the Cloud.  The cool thing is, this actually presents a great opportunity to start building a meaningful model for co-management of risk!  In fact, we can take the PCI model of contractual risk transference but modify where it goes all wrong, and start working to create something better.  And we can start by euthanizing some faulty assumptions.

JUST HOW INFORMATIVE IS PCI DSS?

What might be the.greatest.mistake of the standards compliance mentality is the assumption of value for the past-state measurement.  That is, I believe that the CSO needs more than some “past-state” assurance in order to understand their risk.    If you look at the concept of “PCI compliance” it really is an examination of a past state of nature that is assumed to be relevant to current and future states.   Many people (myself included) are not at all convinced that this past-state is nearly as informative as those who mandate it’s measurement believe it to be.

That’s not to condemn past-state measurements as completely non-informative,  they most certainly are useful.  It’s just that no self-respecting CSO sleeps well because they were deemed “PCI compliant” 10 months ago.  They sleep well because they have good visibility into current-state information and confidence in their strategy concerning future-state (based on that visibility and the outcomes of sound IRM models).

MOVING PAST THE VULNERABILITY SCANNER INTO INTELLIGENCE AND WISDOM

So realizing this new importance (to me, at least) concerning visibility and IRM models, I’m lead to the conclusion that if we are to manage risk in the Cloud, we’ll have to move beyond “PCI Compliance” or the concept that some regular “audit” of controls in place at the host is all we need to understand our ability to manage risk.  No, the CSO must have good information concerning current and probable future states.   This is that “visibility” I spoke of above.  In fact, we’ll need significant amounts of piercing, transparent visibility.  And in order to gain that visibility, our insight into Cloud Risk Management must include significant provisions for understanding a joint ability to Prevent/Detect/Respond as well as provisions for managing the risk that one of the participants won’t provide that visibility or ability via SLA’s and penalties . These SLA’s must be expressed in measurable terms (more visibility), and those metrics must have their roots in the things that help understand how we manage risk (those aforementioned IRM models).

THE CLOUD COMPUTING SECURITY SILVER LINING (sorry couldn’t resist)

As I mentioned earlier, I do see an opportunity to create insight.  The need for visibility and IRM models would allow us to create a “guidance” if you’ll allow me to use the term.  Not a standard or a “best practice” to audit by, but simply a reference document that says “if you’re going to put information on somebody else’s systems and still hold some significant responsibility for that information, here’s the considerations, why they are considerations, and how you might go about collaborating on the management of risk”.

And I think that if we undertake this journey, there is going to be a lot of growth and risk management innovation along the way.  But keen insights into what it means to manage risk will be necessary, and secure and forthright collaboration will be of absolute importance.

I say that last bit because, if these pundits are right about the utility of a hosted computing model - the Cloud will happen regardless of the CSO’s ability or desire to manage it.

• Corporate desktop image
  
• Outlook 2003
• Symantec AV
• PGP-8.1
  

1. Install PGP-9.6
2. reboot twice per instructions
3. Find that my networking completely doesn't work.

1. regsvr32 /u PGPfsshl.dll
2. Run a Registry merge on c:\WINDOWS\system32\PGPlspRollback.reg
3. Reboot

I’d love to have another blog even more specific - “Ok, that Assurance is Evidence Of What, Exactly?

Today he has a great article called:

What’s the matter with Risk Management?

And “in short, it’s everything.” It pretty much sums up why I had to grow to re-evaluate how our industry does risk, risk management, approaches controls & vulnerability and find a new way.   A couple of things jump out at me in reading Chris’ article:

1.)  Just because that Deming cycle sucks and is full of unknowns doesn’t mean “risk” doesn’t exist, nor that it isn’t of primary importance. Nor does it mean that in the absence of model & methodology, we won’t be “doing” risk analysis anyway - just in an ad hoc method and completely from “the gut”.

Our industry calls these unstructured risk analysis “Best Practices”, as it’s an easy and convenient way of sweeping the unknowns under the rug of bureaucracy and enforcing it via peer pressure.

2.)  What this “suckiness” does mean is that your model and methodology aren’t helping you. As Chris intimates, there is too much uncertainty in the inputs for his model (they are, in the language of Bayesians - too subjective to be useful priors).

Take for example how we might be approaching the “controls” part of our analysis.  Chris writes:

“2. What are the controls that we have to employ?
800-53, ISO 27001, PCI, etc.

Still kinda good, but we basically know that ISO is relatively voluntary and NIST supplies a control catalog and not policies. So here we have to take the control catalog, and mash our policies into it.”

I wouldn’t call this “kinda good” at all :)  These control catalogs only provide a hierarchy within which to look for evidence of  our ability to resist an attacker.  They are incapable of making any claim about the effectiveness of the controls when they are operated at 100% efficiency, or more importantly, what % efficiency our specific organization operates at.

Let’s use Chris Hayes’ Initech as our fictional example.

Initech has a control (a back door on a loading dock).  Now the locks on the door are 100% capable of locking the door.  This is different than saying that they are capable of frustrating all but the top 5% of lockpicking burgalars.  It is also diffferent than saying that in a sample of several “walk around audits” the doors are left open 20% of the time (they are not in compliance with policy 100% of the time).  Even worse, that 80% of the time the door is not propped open?  Yeah, tailgating is a known issue.

So we have several different variables here that we need to account for (and it’s just a door).  But the analogy stands that most “risk management” methodologies are “We have a door, yes/no?” And most GRC platforms, when asked for their “opinion” will simply say “door is needed” or, even worse, “a door policy is needed”.

3.)  Criticality and the Source of Value is all messed up in these Risk Management models.

Chris writes:

Someone wants me to tell them which boxes are more critical than others. This is mainly because of budgetary or operational reasons. To which I usually say “All of them, it is a system after all”.

This literally made me laugh out loud.  And this sort of “rate the firewall as Risk = 500 but rate the actual business application as Risk = 157″ thing is also endemic.  Now Chris is very smart here.  He correctly identifies that the value is tied to the business process the systems support, and not to a specific box.  Oh, we scan at the specific box level - but because of the nature of systemic failures - all the boxes in the process are inexorably interrelated.

One of the reasons I really like FAIR is that the losses are quantified (or qualified) based not on some amorphous value of the box or the process itself, but losses are linked to the actions that the threat will take. Take systems in a highly regulated industries as an example.  Usually the most probable losses aren’t due to system compromise per se, but in the disclosure the compromise causes (regulators are a threat source, after all).  But many “risk management” methodologies will say “online banking is worth $2 billion, the value of the systems is therefore $2 billion”.  And suddenly we’re telling executive management that there’s a 60% probability that they’ll lose $2 billion.

4.)  If the primary source of prior information for your “risk management” methodology is a vulnerability scanner - you’re doing it wrong.  Chris writes:

So we ran a scan and now we have a report. A snapshot in time to make all decisions. Where did these vulnerability ratings come from? Do I even know if my system is at risk? What if I spend my time on vulnerabilities that have no threat?

So first, my thoughts are that actual “vulnerability” must be a comparison of the force a threat can apply, and our ability to resist that force (this is a probability statement, btw).

Changing your thinking about vulnerability now helps us understand the problem in several new ways.  First, you can start to divorce yourself from the scanner.  After all, the scanner is simply providing you with current state information that is usually just relevant variance from policy. It doesn’t really tell you about real “weakness in a system” because the system is an interrelated mess of people, processes and IT assets.

5.)  Finally, most “risk management” approaches just *don’t* do a good job of helping us understand the how’s and why’s of managing risk. In the past, I’ve referred to these standards as really being “issue management” because they are at their heart, an act of discovery - a formal process around gathering prior information.  They are not, in and of themselves, capable of linking the issues discovered to the root cause.  And these root causes?  Yeah, they’re the things that create “risk”.  Not a threat, not a vulnerability, not the existence of an asset - the amount of risk that we have stems from our capability to manage it.

So Chris, I completely agree - but I wouldn’t give up yet.  There actually are a few of us who are focused on what you suggest:

Where to go from here: A fundamental revamp of how to deal with Risk. Where risk professionals focus on the treating the sickness and not the symptoms, and come up with some new success/actionable metrics.

Chris, there’s nothing I want to do more than that.

Now I’ve been “accused” of being a quant in the past (hi rybolov!) but in reality the only dogs I have in this fight are the model and the application of scientific method - and really, ethically speaking, I have to be tied to the latter while applying the former.

And I see a false dichotomy in this whole Quant vs. Qual thing.  We, as a profession, tend to create a political divide between the two which, if it even exists, I’d say is based more on our ignorance rather than our expertise.  After all, we are the profession that regularly multiplies across ordinal scales and uses wonderful models like R=VxTxI.   As someone  learning to deal in probabilities and rationalism, I have to recognize that this discussion is really just about the act of observation using different metrics of measurement.

But how we’re going about observing does not change the fact that there is measurement based on observation.  So if I’m working with you I can easily turn your qualitative scale into a quantitative one, and vice-versa.  Yes, Shrdlu, if we had the time, even your most seemingly Qual things could be Quant! (This flexible world view, btw, is an outcome of that new-fangled Bayesian thing).

COGNITIVE BIAS A-PLENTY

But back to what Rich is saying there about information security and risk - and he isn’t/won’t be the only one saying these sorts of things - we should try to understand what’s really going on rather than get caught up in the emotional hurricane.  Our profession suffers several forms of cognitive bias.  The nature of our jobs and what we do can cause us to be focused on the outcome and not the quality of the decision at the time it was made.  We want to bring in things from other professions that are useful, but at times we do view things outside our profession with false correlation to our own (unfortunately for those who write these sorts of articles, financial risk is completely different than operational risk).  We also have the tendency to focus on negative outcomes without acknowledging the positive outcomes (For example, I hear that Alan Greenspan’s new firm is up a couple of $billion in all this mess since he joined them, short sellers are doing quite well - must be because they have qualitative models or something -grin-).  The effect of these biases are compounded by the facts that proper correlation takes more work than we usually give it, and rational thought is not that easy when there’s a witch-hunt mentality.

What also floats in water? (link to Youtube)

WHAT SHOULD WE BE THINKING ABOUT?

So as you and I read opinions that seem to be the polar opposite of irrational exuberance (and there will be plenty between now and the election) we’ll have to ask ourselves, “what really failed here?”  At the risk (pun) of over-simplification:

• Was There an Error on the part of Probability Theory?

After all, Probability Science like all other fields of knowledge is always “advancing” as they say.  So perhaps probability theory is wrong somehow?

I’m personally disinclined to put the blame here, primarily because I would think that there would be evidence from other fields (like Quantum Mechanics) that something is amiss waaaaay before it hit a field like economics.

• Was There Error In The Model Used to Determine Risk?

Some people who understand real estate valuation and complex derivatives and financial risk want to put the blame here.  It’s a little too early to tell, but one thing is for sure - Financial risk is so different from operational risk I couldn’t begin to hazard an opinion on the subject.   But it would seem that this is really somewhere we might look.

• Was There Error In The  Scale Used (Quantitative vs. Qualitative)?

Honestly?  I find it extremely difficult to understand how this could be the source of financial ruin.

• Was There Error on the part of the Decision Maker?

What if all of the above were just fine, and the decision maker chose short term gain over long term stability?  What if this was (to simplify the matter greatly) a choice of “heads” over “tails” and the coin landed on tails?  What if the model represented the right risk (probability of negative outcome vs. positive outcome), but the complex derivative was sold to someone else who had poor “risk management” (ability to make a good decisions)?

Now I have no clue about complex derivatives, and I’m oversimplifying to be sure - chances are like most things, there are several problems that helped create the primary cause. But it seems to me that as we go into incident response mode for the economy, it’s more helpful to do so in a rational, logical manner.

OTHER THINGS WE MIGHT WANT TO CONSIDER

Consider the Source
Some authors (who I think tend to exploit outcome and hindsight bias,and then combine those with indirect ad hominem attacks in order to sell their books), are actually putting forth arguments against the use of analytics.  The source of this is a current epistemic debate between those who believe that only falsification is certain, and those who maintain that neither proof nor falsification are certain, there are only probabilities.    So before you go believing any “quadrants” of usefulness on faith - I encourage you to understand what is at the heart of the discussion.

We All Have to Live In The Real World
The sun will rise tomorrow, and someone will try to find the source of the problem and do a better job.  Now chances are, they’ll be doing it in a quantitative manner.  Chances are also that at some point their models will fail and we’ll need to build new ones.  And this will happen whether the field is cosmology, economics, meteorology, information security, or professional baseball.

WHAT ABOUT YOU, ALEX?

I’m far from certain and subject to change, but these days I lean towards Robin Hanson & MIchael Lewis w/regards to placing blame.

So another week, another travel nightmare.  This week I am in the DC area for a few days, than flying over to Ohio and then back home.  Staying in the DC/Northern Va area I made hotel reservations through our corporate Expedia account (which is now called Egencia BTW). Though it is fine for airline reservations, I regret it every time I make a hotel reservation on Expedia.  This time I reserved a room at the Virginian Suites. I had never heard of it, but it was only $158, which is really cheap for around here.  It had 3 stars and sounded good, so I booked it.

I arrived tonight and as I pulled up I have to say that I thought I made a good choice. It is a converted apartment building and every room is actually a studio type of apartment. It has free parking and is located near where I have meetings in Arlington. I gave my name at the desk and they had my reservation, looking good!  I was given keys to room 707 and headed on up.  I got to room 707 and tried to open the door.  No luck, the keys didn???t work. After a moment or two of trying to make the keys work, the door opens and the guy who is staying in the room wants to know what I am doing trying to get in. Well I was reminded of an old Robert Schimmel comedy routine and ran away from there as fast as I could. 

I went back down to the desk and told them what happened.  The woman at the desk apologized, she meant to write room 700, not 707.  While I am waiting for her to correct this and issue new keys, I am looking at the schedule of events at the hotel today.  That is when I notice that one of the main events of the day was a someone???s funeral!  Thats right, it seems the hotel is used for funerals in the area.  That just freaked me out.  Now I am getting Six Feet Under deja vu here.  I don???t know, call me squeamish, but I just don???t feel good about staying at a hotel that doubles as a funeral home. To top it off, the Internet access here sucks. It is so slow that I am watching the paint dry.  Maybe I should go down and catch a funeral or two while I wait for a page to load.  In any event, I think this will be the last time I stay here.  I just can???t wait for what the rest of this week brings!

So another week, another travel nightmare.  This week I am in the DC area for a few days, than flying over to Ohio and then back home.  Staying in the DC/Northern Va area I made hotel reservations through our corporate Expedia account (which is now called Egencia BTW). Though it is fine for airline reservations, I regret it every time I make a hotel reservation on Expedia.  This time I reserved a room at the Virginian Suites. I had never heard of it, but it was only $158, which is really cheap for around here.  It had 3 stars and sounded good, so I booked it.

I arrived tonight and as I pulled up I have to say that I thought I made a good choice. It is a converted apartment building and every room is actually a studio type of apartment. It has free parking and is located near where I have meetings in Arlington. I gave my name at the desk and they had my reservation, looking good!  I was given keys to room 707 and headed on up.  I got to room 707 and tried to open the door.  No luck, the keys didn’t work. After a moment or two of trying to make the keys work, the door opens and the guy who is staying in the room wants to know what I am doing trying to get in. Well I was reminded of an old Robert Schimmel comedy routine and ran away from there as fast as I could. 

I went back down to the desk and told them what happened.  The woman at the desk apologized, she meant to write room 700, not 707.  While I am waiting for her to correct this and issue new keys, I am looking at the schedule of events at the hotel today.  That is when I notice that one of the main events of the day was a someone’s funeral!  Thats right, it seems the hotel is used for funerals in the area.  That just freaked me out.  Now I am getting Six Feet Under deja vu here.  I don’t know, call me squeamish, but I just don’t feel good about staying at a hotel that doubles as a funeral home. To top it off, the Internet access here sucks. It is so slow that I am watching the paint dry.  Maybe I should go down and catch a funeral or two while I wait for a page to load.  In any event, I think this will be the last time I stay here.  I just can’t wait for what the rest of this week brings!

So I got my iPhone 3G on Friday morning and have been using it for a few days now. I have never used one before, don't use an iPod or even a Mac computer.  The iPhone was incredibily easy to use and without using and manuals quickly had a most everything working and downloaded a bunch of apps from the app store. 

Over all, the iPhone just is really nice to use and in many ways very easy, polished and intuitive. In other ways, it is still missing some key features in my book:

1. Sort and filter email be date, sender, etc.
2. Select more than one mail at a time to delete, move, copy.  Yes I know you can go to edit and select messages to work on, but you still have to select them one at a time. In Windows Mobile you can just run your finger over multiple messages to complete this.
3. Deleting duplicate contacts in bulk.  Doing them one at a time is just painful
4. A task manager. I would like to see some list that shows me which apps are running, how many resources they are using, battery usage and stuff like that.  Also to shut down running apps
5. Better calendar integration. I tried to click on and open calendar items, but just does not seem to work.
6. The battery sucks! I am not getting more than about 6 to 7 hours of battery time. I think I have to turn off the push for my Exchange email.  This is much less that I was getting on my Windows Mobile phone.

I do like the phone, the iPod MP3 and camera and the overall "feel" of the phone. Went to the Apple store in the maill (which was jam packed) and bought a rubberized case, but was unable to get a phone car charger for it yet.  I ordered one for 5 bucks on Amazon and will see it if works.

All in all, things are OK but I am going to withhold my final verdict for a while yet.

So I got my iPhone 3G on Friday morning and have been using it for a few days now. I have never used one before, don't use an iPod or even a Mac computer.  The iPhone was incredibily easy to use and without using and manuals quickly had a most everything working and downloaded a bunch of apps from the app store. 

Over all, the iPhone just is really nice to use and in many ways very easy, polished and intuitive. In other ways, it is still missing some key features in my book:

1. Sort and filter email be date, sender, etc.
2. Select more than one mail at a time to delete, move, copy.  Yes I know you can go to edit and select messages to work on, but you still have to select them one at a time. In Windows Mobile you can just run your finger over multiple messages to complete this.
3. Deleting duplicate contacts in bulk.  Doing them one at a time is just painful
4. A task manager. I would like to see some list that shows me which apps are running, how many resources they are using, battery usage and stuff like that.  Also to shut down running apps
5. Better calendar integration. I tried to click on and open calendar items, but just does not seem to work.
6. The battery sucks! I am not getting more than about 6 to 7 hours of battery time. I think I have to turn off the push for my Exchange email.  This is much less that I was getting on my Windows Mobile phone.

I do like the phone, the iPod MP3 and camera and the overall "feel" of the phone. Went to the Apple store in the maill (which was jam packed) and bought a rubberized case, but was unable to get a phone car charger for it yet.  I ordered one for 5 bucks on Amazon and will see it if works.

All in all, things are OK but I am going to withhold my final verdict for a while yet.

Well, no, security dweebs, we’re on a public policy kick, probably will be until the end of the year (more on that to follow, stay tuned), so you wouldn’t be so lucky.

The Plum Book’s official title is Government Policy and Supporting Positions and basically it’s a huge staffing chart for the Senior Executive Service–the political appointees.  Congress publishes the Plum Book after each presidential election, so for those of us who remember our civics lessons in high school, that would be every 4 years, and the last one was published in 2004.

In fact, you can see the last edition here.  Caveat:  it’s dry, like the uber-trocken Franken white wine that grows in the fields around where I used to live in Germany–so dry that it sucks the moisture right out of you.

Plum Pickin photo by Secret Tenerife

Now why do we care about the Plum Book?  Well, that’s a good question.  Have a look at some of the staffing plans in the plum book, and you’ll see something missing:  Agency CISOs.

Now, I’m not a rocket scientist on org charts, but it seems to me that unless you put CISOs up to where they’re answerable to the agency head, they’re just a cost center inside the IT department with no visibility to the decision-makers.  Once again, we’ve crippled our security staffs like the old-school way of doing things.

On another note, taking a quick straw poll of the agency CISOs that I know, I think about half of them are political appointees, and half of them are GS-15s.  So what’s the difference?

Well, political appointees (SES) are appointed by the President.  They make a better target because they have much more visibility from the higher-ups they are more political in nature.

GS-scale employees are civil service careerists.  Usually these are the guys who have moved up the ranks in the various agencies and know quite a bit of things.

Which is better?  Well, if you want survivability, then GS-scale is the way to go.  If you want to make the most difference, SES is the ticket.

Most of us will never get the choice. =)

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